Warner's Digital Watchdog Widens War on Pirates

By LAURA M. HOLSON

Published: April 2, 2007

Hollywood studios spend millions every year trying to get people to watch their movies. At Warner Brothers Entertainment, Darcy Antonellis is trying to get them to stop watching -- illegally, that is.

Ms. Antonellis oversees the studio's growing worldwide antipiracy efforts as Hollywood's attention shifts from bootleg DVDs made in China to the problem of copyrighted television and movie clips showing up on sites like YouTube and MySpace.

While producers and celebrities garner most of the attention in Hollywood, technology executives like Ms. Antonellis are at the forefront of the industry as they try to protect the studio's control over its content.

With movies like the ''Harry Potter'' series and ''Ocean's 11'' franchise and television series like ''Friends,'' Warner has one of the largest libraries in Hollywood. As a result, it can exert more influence over its relationships with online partners, making it one of the most-watched studios both inside and outside the industry.

''People want to be more interactive and have a voice,'' said Ms. Antonellis. ''We need to consider all the opportunities.''

Piracy may seem like the biggest threat to Hollywood, but Ms. Antonellis suggested instead that changing consumer behavior will have a greater impact on the entertainment business.

Movie studios, like their peers in music and television, are in the midst of a significant and frightening shift as almost every form of media is becoming ubiquitous on the Internet. And through sites like YouTube, viewers have grown accustomed to seeing whatever they want to see, free.

''People thinking it is O.K. to take this stuff for free on a worldwide basis has a bigger impact than anything,'' said Ms. Antonellis.

Many entertainment companies are growing impatient watching companies like YouTube distribute clips of movies and television shows free. At the same time they are concerned that YouTube earns advertising revenue from Web sites that offer pirated movies for sale on the site. Even while negotiating with YouTube, NBC Universal and Fox announced their own joint video service, and Viacom filed a $1 billion lawsuit against Google, which owns YouTube.

Missteps made today could have grave consequences for the future, particularly when it comes to consumers' willingness to pay for movies and television shows online, she believes. To illustrate the point, she tells of her niece's fish, named Mortimer, who one day leaped from his bowl, flopped on the table and gasped for air.

''Mortimer took the leap to freedom,'' she said. ''He said, 'I'm free, but I'm dead,' '' said Ms. Antonellis.

Warner and other entertainment companies are moving cautiously ahead, but their interests are divided. All want to share their content online with consumers but are, at the same time, imposing constraints that risk alienating a younger, Web-oriented audience.

On the piracy front, Ms. Antonellis said Warner has created four small teams that range from a two-person operation to nearly a dozen people in a larger group.

The teams are based in Burbank, London and Hong Kong, and most have dual roles in piracy and other Warner operations, like the legal department. Ms. Antonellis said she wanted the teams to understand both areas because ''you can't hand down policies in a vacuum. It doesn't work.''

Warner's emphasis shifts depending on where piracy is most rampant. As well as cracking down in countries like China, where pirated DVDs are sold on street corners for as little as $1 on the same day a movie is released, the company also works with the United States Trade Representative's office to monitor pirated movies.

Like many studios, Warner can trace the origin of movies that have been copied using camcorders, but they are particularly aggressive on this front. Russia is particularly difficult to police because of the vast amount of money available to finance the making and sale of black market DVDs.

Recently the Hollywood studios took their case to Washington, with celebrities like Will Smith and Clint Eastwood in tow, to educate legislators on the damaging impact of piracy on their business. Ms. Antonellis was there; she is the piracy liaison for Warner to the Motion Picture Association of America, the industry's lobbying group.

For her part, Ms. Antonellis and her team review all the deals Warner seeks, particularly those online and for distributing content over mobile phones. She has considerable sway; Warner deal makers rely on her expertise to tell them how a deal should be structured.

When it comes to YouTube, Time Warner is in a delicate position. In 2005, Google spent $1 billion for a stake in America Online, a division of Time Warner, and expanded its strategic alliance. Google bought YouTube last year.

Not surprisingly, Ms. Antonellis is conservative in her comments about the media companies' negotiations with YouTube.

''Clearly the lawsuit has sent out a message,'' she said of Viacom's suit. ''We are hopeful that social networks such as YouTube will put in place proper systems which will reflect our intellectual property and will facilitate legal offerings.''